Picture this: a SaaS company has innovative products, hundreds of leads, and ideas to scale the product but… still operates on filling in manual spreadsheets. It should not be like that. The solution is obvious: CPQ software to streamline the sales process.
CPQ system as an answer to the challenges of SaaS companies
Spreadsheets and other “traditional” tools might be inefficient for a fast-growing company that relies on effective operation and quick go-to-market strategy. Subscriptions are nice, but SaaS companies need to manage the whole process including amendments, renewals, changes, and operating across various sales channels.
These challenges can only be met when using dedicated software like CPQ. What stands behind these three magic letters? C for configure, P for price, and Q for quote. It is a solution that helps to streamline the quoting process, which is prone to issues like:
- inconsistent pricing
- errors in quotes
- incorrect product configurations
- complex pricing models
- low subscription renewal rates
- difficulty quoting product and service bundles
- long turnaround times for quotes
- revenue leaks due to incorrect quotes and billing
- delays in quote approvals.
Incorporating CPQ into a SaaS company’s operations can lead to increased efficiency, higher conversion rates, and improved customer satisfaction, all while reducing the potential for costly errors. It’s a valuable investment for achieving long-term success in a highly competitive industry.
Instead of a typical CPQ that was made for one-time deals, a SaaS CPQ is built from the ground up to handle how a SaaS business works. This includes:
- Amendments and renewals
- Frequent pricing and packaging changes
- Multiple sales channels
While the decision to invest in CPQ tool may require careful consideration, the potential benefits are substantial. By addressing the unique challenges of the SaaS industry, CPQ can help companies thrive in an increasingly competitive market.
Reasons to implement CPQ software
Implementing Configure, Price, Quote (CPQ) software in a Software as a Service (SaaS) company offers numerous benefits that can significantly enhance operations and drive success.
“A growing number of customers look for organizations to understand and anticipate their needs — for instance, by proactively notifying them of a contract renewal. What’s more, a majority of customers expect offers to always be personalized.”
Source: State of the Connected Customer, Fifth Edition, Salesforce 2022
What are the benefits of the CPQ software for a SaaS company? Beneath the top four reasons for implementing it
Fully automates amendments & renewals
In SaaS, customers often change their initial purchase by upgrading or downgrading an offering or buying another offering (cross-selling).
Amendments and renewals are important for the SaaS business model. If you do it manually, which is what most SaaS businesses do nowadays, it will make your sales process very difficult and cause customers to have a bad experience. And the employees will have similar opinions.
Supports multiple sales channels
The most popular SaaS distribution methods include inbound and outbound sales teams, online self-service, and third-party app stores.
CPQ ensures that your product and pricing information remains consistent, whether you’re selling through direct sales teams, online portals, or third-party resellers. This consistency builds trust among customers and partners.
Supports agility in operations and implementation
Agility is driving SaaS. The world is constantly changing. New products, services, and ideas are coming out every day. They need to keep up with their customers. But loyalty to customers changes quickly.
CPQ streamlines the quoting process. It makes it easier for your sales teams, partners, and even self-service customers to generate accurate quotes quickly. Thus, sales cycles are shortened, and administrative work is cut down.
One source of truth
SaaS companies should rely on consistent, relevant information across the organization. Unless there is a single source of truth, data sets exist in silos and each department operates as a black box.
A unified view of customer interactions, orders, and performance across all sales channels can be achieved by integrating CPQ with other systems like CRM and ERP.
The impact of CPQ solution on the SaaS companies
CPQ solutions possess a significant impact on SaaS enterprises, delivering advantages that extend throughout the organization:
- Customers receive quicker responses to their inquiries
- Efficiency skyrockets as manual processes are automated.
- Accurate quotes are a game-changer, preventing costly errors and improving revenue.
- Collaboration within teams becomes seamless.
- Standardization of pricing and configurations ensures consistency.
A CPQ tool in itself only focuses on the quote and hence gets coupled with a document management system to fill the gap. But ultimately, it becomes a catalyst for SaaS companies, streamlining operations and boosting customer satisfaction.
